The exploitation of migrant workers in the Gulf states has been worrying human rights groups for some time but now the recession is making their predicament even worse.

Usually employed in a semi-formal manner with large companies, Asian workers in United Arab Emirates fall within a vacuum of employment law and social welfare and hence become the first casualties of a recession. Usually indebted to their agents or "sponsors", ie those who have purchased visas on their behalf, and bereft of passports or identification documents confiscated by their employers, they now inhabit a "grey economy".

Dubai, with its recent construction boom, has been the focal point for media coverage of abused migrant workers. The problem occurs worldwide but it is undoubtedly more highly concentrated in the Gulf. Because of snobbish attitudes regarding the types of work that locals will take on, an entire underclass of migrant workers has been imported to clean, drive, chauffeur, build and serve.

This even prompted an official policy of "Saudisation" in Saudi Arabia (where the slogan was "Be Saudi, Hire a Saudi") in order to counter unemployment among Saudi citizens. Like those in Dubai, migrant workers have their passports confiscated and replaced with an iqama or residence permit. If there is an erosion of goodwill between employee and employer then identification documents are kept hostage.

Even as a white collar worker in Saudi Arabia, I found that merely leaving the country on holiday required an exit visa, which was only issued once the authorities had established that there were no outstanding debts, traffic violations (which was ironic, for as a woman I was not allowed to drive), warrants, etc. Mark Lagon on the US state department blog commented: "This system, which is seen throughout the Gulf, is compounded in Saudi Arabia by the disproportionate power given to employers of housemaids, construction workers, and agricultural labourers in the form of exit permits."

Even in the good times, this is fertile ground for abuse. When an economy is buoyant, migrant workers supply cheap labour, which naturally gets cheaper as recession bites and re-employment options dwindle. However, this classic pattern is further exacerbated by the fact that these workers are subject to the additional restrains of debts to their employers or agents and their inability to leave the country and relocate.

While abuse of cheap labour is not confined to the Middle East, the entrenched anti-immigration, anti-naturalisation policy in Arab states means these workers will never be afforded the rights of citizens irrespective of how long they have spent in the country. As freedom of movement is denied, a situation has developed where workers are forced to remain and take itinerant cash-in-hand jobs, undercutting other workers by eschewing basic provisions such as healthcare in a grim race to the bottom. In addition, owing to the draconian terms of sponsorship law, where one's visa is linked to one's job, workers cannot easily seek alternative work legally and thus fall into illegal, informal, sporadic employment.

Ellene Sana, executive director of the Philippines Centre for Migrant Advocacy, agrees that the human rights of these workers stand to be compromised because of the economic downturn.

"Migrant workers will be desperate for work and will accept anything just to keep their jobs. When you're desperate, you lose your sense of dignity. You'll settle for anything that you can get," she said. These conditions reached such exploitative levels that construction workers rioted in Dubai for the first time since the downturn, halting traffic as thousands protested against low wages.

There have been some advances in employment law in the region brought on partly by international pressure. The UAE now gives workers six months rather than one month to seek alternative employment before visas are cancelled and Bahrain has done away with its sponsorship law which, as the labour minister acknowledged, did "not differ much from slavery". But while cheap labour underwrote the rapid infrastructural and economic development of some Gulf states, in times of slowdown the bureaucratic and legislative backwardness (not devoid of elements racial discrimination) of the region exposes how little has been achieved.